Question

Prime Corp. has an ending balance in the accounts receivable account of $100,000. Prime recorded bed debt expense of $3000. Prime has an ending balance in the allowance for uncollectible accounts of $7000. What is the net realizable value of accounts receivable?
$93,000 T/F

Answer 1

Answer:

True

Explanation:

Prime's net realizable value of accounts receivable = accounts receivable balance - allowance for uncollectible accounts = $100,000 - $7,000 = $93,000

Bad debt expenses have already been debited, so they are no longer part of the allowance for uncollectible accounts.